Author: HighFreedom (X: @highFree 2028)
From the near future to around January 5th next year, this time window may gradually enter a relatively good time to long BTC:
1. Macro US dollar liquidity: Due to the regular short-term liquidity squeeze at the end of the year, which leads to a short-term surge in SOFR, squeezing risk assets.
Liquidity is expected to recover around January 4th (at which time SOFR will be below EFFR again, and this is also the trend at the end of 2023, with SOFR returning to normal in January 4, 2024).
Specifically, the logic chain is: Financial institutions begin to reduce leverage and increase cash or cash equivalents to cope with regulatory compliance at the end of the year -> Market liquidity is temporarily withdrawn -> The shortage of funds leads to a surge in ultra-short-term financing rates -> Strategies in the US stock market that are extremely sensitive to short-term interest rates are squeezed and forced to unwind -> US stocks are squeezed -> BTC follows the squeeze.
2. Whales:
BTC on-chain: Long-term holders (LTH) have almost stopped selling after the large-scale selling (a total of 1 million BTC) since the start of the major uptrend after the election, the trend of whale selling has stopped
Bitfinex whales: They have started to persistently buy BTC spot at around 0.2% premium
Bitfinex leveraged long BTC positions: They started to increase their positions from the evening of the 28th
3. Americans are starting to work again:
Recently, USDT has not had any issuances at the $1 billion level, and it is almost confirmed that MSTR has not bought any coins. It is expected that Americans will start coming back to work and buying coins after January 1st (MSTR is an exception, the optimistic scenario is a two-week blackout period from January 14th to the February 5th earnings call when they cannot finance to buy coins; the pessimistic scenario is a four-week blackout period from January 1st to the February 5th earnings call when they cannot finance to buy coins)
4. The pullback has bottomed out:
It has grinded the bottom around 92-93 multiple times, and has pulled back around 20% from the high of $108,000 to $92,000. Except for the 8/5 black swan event, the pullback in this bull market has been mostly within 20%
5. The bubble deflation is relatively clean:
Even if the US stocks fell last Friday mainly due to short-term liquidity squeeze, the Nasdaq index fell at most 2% intraday, and I observed that BTC also fell around 2% at that time, giving a sense of relatively clean bubble deflation
6. Order book: In the past one or two days, there have been some relatively dense and large-amount orders on the Binance spot market
7. Altcoins: They seem to have a hard time falling further
Risks:
1. Whether the BOJ will hike 25 bps on January 23rd is a sword hanging over our heads, the overall tendency of the Japanese Financial Services Agency officials is to skip the hike, but the statements are ambiguous, so we can only continue to observe. The market is currently pricing in a 40% probability of a hike; in addition, the JPY/USD exchange rate is approaching 160 again (currently 157.88 when writing this article), if it reaches 160, it may challenge the BOJ's bottom line to some extent, which may increase the probability of a hike
Question: Could you please advise, the recent negative premium on Coinbase BTC is a good or bad signal?
